The Czech Republic is drawing up plans for the recovery of the economy

Our colleague Vladimir Dobos, from our representative office in Prague, explains the developments in the Czech Republic in the wake of the Corona crisis. The Czech Republic requires a highly productive port to handle most of its exports and imports and therefore uses the Port of Hamburg.In the Czech Republic, the prevailing state of emergency law was extended by another 30 days and the nationwide quarantine until Easter. The Czech Republic is facing an economic downturn. The Czech Finance Minister Alena Schillerová foresees an economic recovery opportunity only in the third quarter of 2020. The Finance Minister is budgeting a 200 billion crowns (8.4 billion Euros) deficit to support the economy. If the pandemic persists, an adjustment of the budget can be assumed.

The government advocates the early start of production, under consideration of the 2-meter safety distance between employees, to enable the operation of selected companies and industries. The priority should be given to industrial- and export companies. These companies provide tens of thousands of jobs, according to the Czech Minister for Industry, Trade and Transport Karel Havlíček. By the end of June, he expects a shortage of resources between 600 and 700 billion crowns (22 to 26 billion Euros).

According to first forecasts by the Czech Savings Bank (Česká spořitelna), the economic growth of the Czech Republic is expected to contract by 6.7 percent in 2020 if the virus continues to spread during the second quarter. If there continue to be restrictions in the economy due to the Corona virus measures, a decline of almost 10 percent can be expected. Should the nationwide quarantine measures and financial support for the economy prove successful, the economic contraction could be limited to 4.2 percent. Prior to the pandemic, the Czech Republic expected an economic growth of two percent.